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S&P downgrades Gamco, debt to BBB-
Standard & Poor's said it lowered its ratings on Gamco Investors Inc., including its long-term issuer credit rating and unsecured debt ratings to BBB- from BBB and short-term issuer credit rating to A-3 from A-2.
All ratings were removed from CreditWatch, where they were initially placed on May 13, 2015, with negative implications.
The outlook is negative.
S&P said the downgrade follows the completion of Associated Capital Group Inc.’s (ACG) spin-off from Gamco. Alongside the transaction, Gamco is entering into a $250 million PIK note payable to ACG that it expects to pay down ratably over its five-year life.
Overall, the agency expects that Gamco will operate with leverage close to 2 times in 2015 and between 1.5 times and 2 times in 2016, which will weaken the company's financial risk profile to "modest" from "minimal" under the criteria.
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